Senators were yesterday divided over the complete removal of subsidy on petroleum products to save the nation the huge sums `wasted’ on subsidy of premium motor spirit, PMS, as they debated the 2016, 2017 and 2018 Medium Term Expenditure Framework, MTEF.
Some of them based their arguments on the fact that even with the subsidy, petroleum products still sold higher than the regulated price in all parts of Nigeria apart from Abuja, Lagos and Port Harcourt.
While contributing to the consideration of the Medium Term Expenditure Framework, MTEF, and Fiscal Strategy Paper, FSP, on the floor of the Senate, the senators also advocated for more borrowing to industralise the nation.
Sen. Ben Bruce (PDP Bayelsa) said that there was no need borrowing two or three trillion every year when the nation could borrow a lump sum and utilize it in industrialising the nation.
He exemplified that Brazil took such loans to develop, and that Nigeria should emulate such economic move and spread the repayment over 50 years.
“If you have to borrow 50 trillion then borrow that and industrialise Nigeria over night,” he said.
Speaking on the oil benchmark of $38, he advocated that the budget should be reviewed every three months and adjusted if need be in line with the economic realities of oil prices.
Sen. Bruce also advocated the removal of fuel subsidy, stressing that all successive governments had maintained the wrong argument on the deregulation policy.
He said that the governments focused more on price of petrol rather than the cost of transportation, stressing that a subsidised transportation policy will cushion the effect of deregulation.
“Government should ask what the price of transportation is; not how much a litre of petrol is.
“We should think of a mass transit policy which will cost no more than N100billion which is about 10 per cent of what we spend on subsidy.
If people spend the same amount of money on transportation after deregulation, nobody will protest on the street.
“Nobody in UK or US knows the price of petrol but in Nigeria, everybody knows because we have made the wrong arguments,” he said.
He advocated that the states should have more money than the federal government because the state government is closer to the people who need to be developed.
Sen. Toyo Alasoadura (Ondo Central) also advocated that government should go and borrow `heavily’.
“Let us borrow on a 50 year plan, develop the nation’s infrastructure and we are in safe hands,” he said.
He however said that the benchmark was okay, adding that a quarterly review of the budget in line with realities will be necessary.
Sen. Solomon Adeola (APC Lagos West) argued also in favour of more borrowing in a lump sum rather than the borrowing that is done in bits and pieces.
“I will suggest that we leave the benchmark for now at $38 per barrel as proposed by the President but allow the committee to go back and do a thorough job and advise us accordingly.
“Projection of N4.5 trillion as the independent revenue of the Federal Government for 2016 is a little bit on the high side. But when we look at something in the region of N4 trillion, we can start looking at the realities on ground and the indices before us,” he said.
In his contribution, Sen. Dino Melaye (APC Kogi West) queried why the nation had continued to pay subsidy even when oil prices had dropped from over $100 to about $45 now.
Sen. Bassey Akpan (PDP Akwa Ibom North East) while stressing on the need for timely submission of the MTEF said that the senate must take a fundamental stance on fuel subsidy payments.
“The issue of subsidy is not sustainable so I believe that as a people we must understand that we have been buying fuel at N195 per litre so where is the benefit of subsidy,” he queried.
However, Sen. Jubrin Barau (APC Kano North) vehemently opposed the removal of subsidy stressing that it was a form of welfare package for the citizenry.
He said that even the international community which advocate the removal of subsidy have welfare packages for their citizens.
“I say no to removal of oil subsidy, it is a kind of welfare arrangement,” he said.
He said that the major challenge in the oil sector was that of pipeline vandalism which inhibited the pumping of crude to refineries and the pumping refined products to the depots.
Other senators who spoke urged the executive to be more timely in presenting the two documents while urging for the diversification of the nation’s revenue as oil revenue was now unsustainable.
The Senate referred further consideration of the MTEF and FSP to the committees on Finance and Committee on National Planning to report back in one week.
The Senate thereafter adjourned plenary to Thursday.

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